T. V. D. B. Sarl v. KAPLA USA, LP
4:12-cv-00230
S.D. Ga.Dec 16, 2013Background
- Kapla (French) sold precision wooden toy blocks to KAPLA USA (exclusive U.S. distributor formed by Chayette); blocks shipped from Morocco. KAPLA USA ordered product but failed to pay certain invoices totaling approximately €61,769 (after adjustment).
- In 2009 Tom's Toys, LLC was formed; plaintiffs sued KAPLA USA, KAPLA USA GP, CITIBLOCS (a new company selling similar blocks), Kapla France, and Marjorie Chayette for breach of contract and multiple torts; parties cross-moved for summary judgment.
- Kapla seeks conversion of unpaid foreign‑currency debt and requested guidance on conversion date/rate and pre‑judgment interest; court ordered briefing on those points.
- Plaintiffs allege CITIBLOCS is a successor to KAPLA USA (liable for debts) and ask to pierce the corporate veil to reach Chayette; defendants deny successor status and veil piercing and move for summary judgment on many claims.
- The court granted summary judgment for Kapla on breach of contract and concluded CITIBLOCS is a successor in interest to KAPLA USA (contract liability survives); the court granted defendants summary judgment on unjust enrichment, conversion, negligent misrepresentation (purchase-contract claims), tortious interference, and federal trade‑dress infringement.
- The court denied summary judgment and left for the jury claims of breach of fiduciary duty, trade‑secret misappropriation, Georgia Deceptive Trade Practices Act violations, and unfair competition; the court refused to pierce the corporate veil to reach Chayette (but left open her personal liability for torts and fiduciary claims).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract (unpaid invoices; currency conversion) | Kapla: KAPLA USA owes €61,769; court should enter judgment; parties must pick conversion date/rate and pre‑judgment interest | Defs: dispute other than contract claims; Tom lacks standing; conversion/interest issues unresolved | Court: Grants summary judgment to Kapla on breach; parties ordered to brief proper EUR→USD conversion date/rate and pre‑judgment interest; Tom dismissed for lack of standing as to pre‑existing debt |
| Unjust enrichment | Kapla: in the alternative, KAPLA USA was unjustly enriched by retaining goods without payment | Defs: express contract exists, so unjust enrichment unavailable | Court: Grants summary judgment for defendants on unjust enrichment (contract exists) |
| Successor liability (CITIBLOCS liable for KAPLA USA debts) | Plaintiffs: CITIBLOCS is a continuation/successor of KAPLA USA (shared personnel, name use, bank accounts) | Defs: CITIBLOCS was a separate, validly organized entity with separate accounts and contractors | Court: Concludes CITIBLOCS is successor in interest to KAPLA USA and liable on breach of contract |
| Piercing corporate veil (reach Chayette personally) | Plaintiffs: Chayette commingled assets, used same names/accounts, misused corporate form | Defs: formalities observed; separate organization and operations; insufficient abuse to pierce | Court: Denies veil piercing; insufficient evidence to impose personal liability solely via veil piercing (but leaves fiduciary/tort claims against her) |
| Breach of fiduciary duty by KAPLA USA | Kapla: distributor owed fiduciary duties as exclusive distributor and preferred certain parties (transferred funds to CITIBLOCS) | Defs: distributor relationships are arm’s length and not fiduciary; no evidence of profit‑sharing/control | Court: Denies summary judgment; factual issues remain for jury on fiduciary duty and whether transfers favored certain creditors |
| Trade secrets / unfair competition / DTPA / tortious interference / trade dress | Plaintiffs: defendants misappropriated trade secrets (pricing, customers), interfered with business, used Kapla imagery and product features, and engaged in deceptive practices | Defs: asserted materials are functional (size/ratio), pricing/factory costs not secret, no evidence of actual confusion or direct misrepresentations to Kapla’s customers | Court: Grants summary judgment to defendants on tortious interference and federal trade‑dress infringement; denies summary judgment on trade‑secret misappropriation, Georgia Deceptive Trade Practices Act, unfair competition, and negligent misrepresentation claims tied to deceptive practices — those survive to jury (but negligent‑misrep claim tied to purchase‑contract promise fails as duplicative) |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires injury‑in‑fact, causation, redressability)
- Shotz v. Cates, 256 F.3d 1077 (standing requires injury‑in‑fact causation redressability)
- Seguros Del Estado, S.A. v. Scientific Games, Inc., 262 F.3d 1164 (proper exchange‑rate selection for foreign‑currency judgment matters for damages and pre‑judgment interest)
- Optimum Techs. v. Henkel Consumer Adhesives, 496 F.3d 1231 (typical distributor relationship does not create fiduciary duty)
- John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966 (trade‑dress infringement requires non‑functional features and secondary meaning)
- Ware v. Rankin, 104 S.E.2d 555 (Georgia law — fiduciary duties may be imposed in limited circumstances where defendant was insolvent at transaction time)
- ULQ, LLC v. Meder, 666 S.E.2d 713 (contract breach does not automatically create conversion; confidential relationship required to convert contract claim)
- Hickman v. Hyzer, 401 S.E.2d 738 (Georgia — rescission of improper payments to shareholders does not equate to veil piercing; remedies to reach corporate funds exist)
- Almond v. McCranie, 643 S.E.2d 535 (corporate officer who participates in corporate tort can be personally liable)